Mother Earth Travel > Country Index > Argentina > Map Economy History |
| Economy - overview: Argentina benefits from rich natural
resources, a highly literate population, an export-oriented agricultural
sector, and a diversified industrial base. However, when President Carlos
MENEM took office in 1989, the country had piled up huge external debts,
inflation had reached 200% per month, and output was plummeting. To combat
the economic crisis, the government embarked on a path of trade
liberalization, deregulation, and privatization. In 1991, it implemented
radical monetary reforms which pegged the peso to the US dollar and
limited the growth in the monetary base by law to the growth in reserves.
Inflation fell sharply in subsequent years. In 1995, the Mexican peso
crisis produced capital flight, the loss of banking system deposits, and a
severe, but short-lived, recession; a series of reforms to bolster the
domestic banking system followed. Real GDP growth recovered strongly,
reaching 8% in 1997. In 1998, international financial turmoil caused by
Russia's problems and increasing investor anxiety over Brazil produced the
highest domestic interest rates in more than three years, halving the
growth rate of the economy. Conditions worsened in 1999 with GDP falling
by 3%. President Fernando DE LA RUA, who took office in December 1999,
sponsored tax increases and spending cuts to reduce the deficit, which had
ballooned to 2.5% of GDP in 1999. Growth in 2000 was a disappointing 0.8%,
as both domestic and foreign investors remained skeptical of the
government's ability to pay debts and maintain its fixed exchange rate
with the US dollar. One bright spot at the start of 2001 was the IMF's
offer of $13.7 billion in support.
GDP: purchasing power parity - $476 billion (2000 est.) SOURCE: The World Factbook |
Mother Earth Travel > Country Index > Argentina > Map Economy History